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Chancellor Angela Merkel's pronouncement last weekend that attempts to build a "multicultural" Germany had "failed, absolutely failed" was hardly the first such tirade against immigrants. In August, Thilo Sarrazin, a former board member of Germany's central bank, caused a stir by writing in his bestselling book, Germany Does Away With Itself, that Muslim immigrants are "dumbing down" Germany and the rapid growth of the immigrant population was contributing to the country's decline. But while Merkel's comments during an address to the youth wing of her conservative Christian Democratic Union (CDU) on October 16 came as an unusually emotional outburst, she may nonetheless have had a political motive for weighing in on the fraught topic of immigration. (See pictures of Germany's New Hitler Exhibit.)

The Chancellor's comments appear directed at Germany's 3 million Turkish immigrants, who began to arrive as "guest workers" ("Gastarbeiter") to fill labor shortages during the 1960s and '70s. And they were received with a standing ovation, clearly pleasing her party's hardline conservatives, who have long argued that Muslim immigrants are poorly integrated. With her conservative bloc trailing in the polls ahead of a key state election next March, commentators seized on Merkel's speech as evidence of a rightward populist shift designed to tap into German fears about the economy and immigration. (See "Is Spain's Tolerance for Gypsies a Model for Europe?")

"This was a response to her party's disastrous approval ratings  Angela Merkel is reaching out to disgruntled conservative supporters and to many Germans who harbor strong prejudices about immigrants," says Jürgen Falter, professor of political science at the University of Mainz. "Immigration used to be a sensitive topic and for decades it was suppressed in Germany. The issue has suddenly exploded onto the public stage." And, Falter says, Merkel is hoping that "anti-immigration rhetoric will be a vote-winner."

Sarrazin's book and Merkel's comments certainly resonate with many Germans. A report published last week by the center-left Friedrich Ebert Foundation found that negative attitudes towards foreigners living in Germany have surged. One in three survey respondents said immigrants had come to Germany to exploit the country's generous welfare benefits, and "should be sent home" when jobs are scarce. A similar number said the country was "overrun with foreigners". One in ten respondents also wanted a new "Fuhrer" to rule Germany "with an iron fist".

Merkel's statement appeared to echo controversial anti-immigrant remarks two weeks ago by one of her coalition partners, Horst Seehofer, the conservative governor of the southern state of Bavaria. Seehofer prompted a furious reaction from Germany's Turkish community when he told the magazine Focus, "It's clear that immigrants from other cultural circles, like Turkey or Arab countries, have more difficulties... we don't need any more migrants from other cultural groups." Seehofer said Germany should first "deal with the people who already live here" and "crack down hard on those who refuse to integrate" before opening the doors to further immigration. Turkish community leaders demanded an apology. "These comments were inflammatory and irresponsible," Hilmi Kaya Turan, the deputy head of Germany's Turkish community, told TIME, adding that Chancellor Merkel and Horst Seehofer were "exploiting popular fears about immigrants for political gain  the government's immigration bashing is sending a signal to far-right parties and will only encourage extremism."
(See "German Railway Controversy Sends Angela Merkel Off Track.")

Opposition parties rushed to condemn Merkel's speech as a cynical political stunt. Horst Seehofer "is pandering to resentments and public worries about foreign infiltration" and Merkel "can't pluck up the courage to contradict him," said Sigmar Gabriel, the leader of the Social Democrats. Renate Künast, the Green Party's parliamentary leader, accused Merkel of "looking for an enemy" in order to "distract attention away from the problems in her party."

Still, even though Merkel tried to appease her conservative critics by urging immigrants to learn German and comply with local laws, she also struck a conciliatory note, reminding her audience of young conservatives that immigrants were welcome in Germany. (German President Christian Wulff had grabbed headlines by declaring in an October 3 speech that "Islam is also part of Germany.") Merkel held up the 22 year-old German football star Mesut Özil, a hero of last summer's World Cup campaign that had thrilled the nation and who was born to immigrant Turkish parents, as an example of successful integration and urged Germans to step up efforts to integrate immigrants. But she did add that immigration shouldn't be encouraged "until we have done all we can to help our own people to become qualified and give them a chance."

Merkel is caught on a political tightrope: While playing to fears over immigrants may win her votes, the economic reality is that Germany faces an acute labor shortage. As Europe's biggest economy gets back on its feet after last year's deep recession, analysts say a lack of skilled workers could jeopardize the recovery that has seen unemployment figures fall, in September, to 7.5%. According to the German Chambers of Commerce, the country needs 400,000 skilled workers, in particular IT specialists and engineers  and it's estimated that the labor shortage is costing the German economy at least $20 billion each year. That has prompted more liberal-minded ministers in Merkel's center-right government to call for new measures to encourage immigration by skilled workers.

Economy minister Rainer Brüderle has argued that Germany should introduce a points-based system of immigration, like in Canada or Australia, which eases the terms of immigration for those whose skills are most desired. But his view is not shared by Interior Minister Thomas de Maizière, who responded that "the existing laws are flexible enough." The government, clearly divided on the issue, is due to hold a summit on November 18 to try to thrash out an agreement on ways to tackle the skilled labour shortage. And, with a key state election looming in the conservative stronghold of Baden-Württemberg next March  which polls predict will see Merkel's CDU party eclipsed by a coalition of the SPD and Greens  it's expected that Merkel's party will sharpen its attacks on immigrants in the hope of bolstering its grip on power.